How Capitalized Interest Rate Attributes Work Together
Capitalized interest rates represent interest types that are used for capitalizing costs. The application calculates and capitalizes interest on construction-in-progress costs based on the attributes you define for a capitalized interest rate.
Capitalized Interest Rate Attributes
Define the following key attributes for a capitalized interest rate:
Capitalized Interest Rate Attributes |
Description |
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Expenditure Type |
Specifies the type of interest transaction that the rate generates. |
Expenditure Organization Source |
Specifies the expenditure organization source for the generated capitalized interest transactions. |
Threshold |
Note: All threshold specifications must be met before capitalized
interest is calculated.
Determines when projects with the capitalized interest rate are eligible for interest calculation. Thresholds are defined for a business unit and capitalized interest rate combination. A rate can have more than one business unit but the threshold that you define is specific to a business unit. You can specify any combination of the following threshold settings:
|
Current Period Calculation Method |
You can control the construction-in-progress balance on which interest is calculated by specifying current period calculation method and excluded expenditure types. The current period calculation method specifies how much of the current period construction-in-progress costs are included in the construction-in-progress balance. |
Interest Method |
Specify if interest must be calculated on a simple or compound basis. |
Basis Method |
Determines if interest amounts are spread evenly across accounting periods or are derived based on the number of days in each accounting period. |
Excluded Expenditure Types |
You can exclude one or more expenditure types from the construction-in-progress costs basis for a business unit to calculate capitalized interest. |